Breakfast

  By Guest Blogger Doug Rowat

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A few days ago, I had eggs for breakfast.

Before you shrug, let me also add that it inspired me to walk through the entire oil-consumption supply chain. I won’t even start with the chickens, just the eggs.

The eggs were packaged then transported to the store by truck and refrigerated. Oil consumption (in one form or other). The eggs were boiled on a gas stove. Oil consumption. The pot I boiled the eggs in was made of steel with a plastic handle. Oil consumption. The shells were placed in a plastic garbage bag in a plastic garbage bin. Oil consumption. I then scrubbed the pot with hot water, steel wool and soap, and then left it on a plastic drying rack. More oil consumption.

The eggs represented the tiniest sliver of my day, yet they were completely intertwined with the oil industry. Multiply this globally, and by all the other aspects of our daily lives, and virtually our entire existence involves oil consumption.

Oil consumption isn’t just filling up your car at the pump—EVERYTHING requires oil. And therefore, the entirely predictable occurs: worldwide oil consumption steadily rises year after year after year:

World oil consumption (1980-2025)

Source: Worldometer

So, with this relentless demand backdrop, how can you afford not to have long-term oil and gas exposure in your portfolio? Banks get all the attention in this country (and rightfully so), but our largest oil and gas companies have more than held their own:

The Big 5 bank stocks have done great, but so have the Big 5 energy stocks

Source: FactSet, Turner Investments

I’m not recommending that you hold any of these stocks individually—we all know the dangers of company-specific operational risk (own them through a diversified ETF). However, their performance clearly illustrates the importance of having long-term energy exposure.

And in the short term? I couldn’t begin to predict what will happen next with Iran. Will Trump capitulate with a deal that’s entirely unfavourable to Americans simply to stabilize the situation ahead of the US mid-term elections? Will he just bomb incessantly? Or maybe target more civilian infrastructure (or, God forbid, more civilians)? My money’s on the first option, but who knows?

So, oil and gas exposure is also essential in the moment. This moment.

FactSet, in its Q2 S&P 500 earnings analysis, perhaps best sums up why energy sector exposure is so important right now:

The Energy sector is reporting the highest (year-over-year) earnings growth rate of all eleven sectors at 128.2%. Higher (average) oil prices on a year-over-year basis are contributing to the year-over-year increase in earnings for this sector, as the average price of oil in Q2 2026 ($92.55) was 45% above the average price of oil in Q2 2025 ($63.68).

Yes, the results of the energy sector are even eclipsing those of the technology sector. Not an easy feat.

But it’s not just Canadian and US energy exposure that’s useful. International exposure’s also important. The UK’s FTSE 100, as one example, has close to a 10% energy weighting, with UK oil giants BP and Shell both up well over 20% so far this year. Emerging markets too are heavily commodity-focused with Brazil, in particular, having leverage to oil prices. Most emerging-market benchmarks have recorded double-digit gains this year. If this war in The Middle East drags on, this is all portfolio exposure that you’ll want to have.

You can install all the hydro, wind, nuclear and solar capacity you want, but the world still runs on oil and will for decades to come. And the geopolitical environment we’re in at the moment further emphasizes oil’s importance. Make sure your portfolio’s benefitting from this.

Now let me tell you about the toast that I had with my eggs.

Doug Rowat, FCSI® is Portfolio Manager with Turner Investments and Senior Investment Advisor, Private Client Group, Raymond James Ltd.

Source: https://www.greaterfool.ca/2026/08/01/breakfast/